question

strategy "place" decisions would include:

answer

-type of physical distribution facilities. -type of channel of distribution. -degree of market exposure desired. -distribution customer service level.

question

Which of the following best illustrates adjusting "discrepancies of assortment?"

answer

A hardware store sells all the hardware items wanted by most people

question

When an online intermediary like Hulu scans thousands of hours of programming each week and groups these programs into categories of digital programs (e.g. sports, crime, etc.), this is an example of:

answer

sorting

question

Every morning, Sycamore Dairy picks up milk which farmers have "milked" that morning. The dairy processes the milk and separates the cream from the milk. Some of the cream is made into butter and packaged in various sizes. The milk and remaining cream are blended into various products, sealed in pint, quart and half-gallon containers, and delivered to supermarkets in the quantities and assortments they want. The dairy is providing what regrouping activity?

answer

-assorting -accumulating -sorting -bulk breaking

question

From a producer's viewpoint, which of the following is an advantage of INTENSIVE DISTRIBUTION over selective distribution?

answer

Intermediaries' facilities will be more convenient for customers.

question

Distribution agreements which limit sales by customer or territory:

answer

-may be legal if they are vertical agreements between producers and intermediaries -are definitely illegal if they are horizontal agreements among competing producers or intermediaries.

question

In Europe, auto manufacturers are required by law to allow owners of their brands to give the cars back to the manufacturers at the end of their useful life. The manufacturers must then recycle and reuse at least 85 percent of any vehicle made after 2004. This is an example of a(n):

answer

take back law

question

Which of the following is typically the lowest risk approach for moving into international markets:

answer

exporting

question

To minimize its own risks, the Boomtown Petroleum Corp. of Houston, Texas, operates a South American oil refinery that is owned by residents of that country. Boomtown is engaged in an activity known as:

answer

management contracting

question

logistics

answer

the transporting, storing, and handling of goods in ways that match target customers needs with a firms marketing mix -also known as physical distribution

question

About what percentage of the cost of health care supplies in the U.S. are a result of logistics?

answer

33%

question

When planning physical distribution, the marketing manager should:

answer

minimize the cost of distribution for a given customer service level.

question

The "total cost approach" to physical distribution management:

answer

might suggest a high-cost transporting mode if storing costs could be reduced enough to lower total distribution costs.

question

A supply chain

answer

requires skill in coordinating activities among different firms, and this has prompted many firms to seek help from outside experts.

question

the transportation function adds value by

answer

-helping achieve economies of scale in production -making products available when they're needed.

question

regarding railroads:

answer

full carload rates are lower than less-than-carload rates.

question

Which of the following transportation modes is "best" at handling a variety of goods?

answer

water

question

When Sony manufactures and packages DVD players in Japan, stores them in large 8'x8'x20' "boxes," and then ships these boxes to Los Angeles by boat, this is an example of:

answer

containerization

question

A cheese processor having regular need for regional storage of a large quantity of cheese probably should use ______________ warehouses.

answer

private

question

Compared to a warehouse, a DISTRIBUTION CENTER is:

answer

set up to speed the flow of products toward the consumer.

question

place

answer

making goods and services available in the right quantities and locations when customers want them -often have long run effects

question

channel of distribution

answer

any series of firms or individuals who participate in the flow of products from producer to final user or consumer

question

direct marketing

answer

direct communication between a seller and an individual customer using a promotion method other than face to face personal selling ex. park seed company sells the seeds it grows directly to consumers with a mail catalog and website -primarily concerned with promotion

question

the most important reason for using an indirect channel of distribution is that

answer

an intermediary can often help producers serve customers needs better and at a lower cost

question

discrepancy of quantity

answer

the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want

question

discrepancy of assortment

answer

the difference between the lines a typical producer makes and the assortment final consumers want

question

regrouping activities

answer

adjust the quantities or assortments of products handled at each level in a channel of distribution

question

accumulating

answer

collecting products from many small producers

question

bulk breaking

answer

dividing larger quantities into smaller quantities as products get closer to the final market

question

sorting

answer

separating products into grades and qualities desired by different target markets

question

assorting

answer

putting together a variety of products to give a target market what it wants -usually done by those closest to the final consumer or user ex. Hulu

question

ideally, all of the members of a channel system should have a shared ________________________ with all members

answer

product market commitment -focusing on the same target market at the end of the channel and sharing the various marketing function in appropriate ways

question

traditional channel systems

answer

the various channel members make little or no effort to cooperate with each other -they buy and sell from each other and thats the extent of their relationship

question

two basic types of conflict in channels of distribution

answer

vertical and horizontal

question

vertical conflicts

answer

occur between firms at different levels in the channel of distribution -may occur if a producer and a retailer disagree about how much promotion effort the retailer should give the producers product

question

horizontal conflict

answer

occur between firms at the same level in the channel of distribution

question

channel captain

answer

a manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts -in the US, producers frequently take the lead in channel relations: usually select the target market, develop the product, set the price, done some consumer and channel promotion, and developed the place setup

question

vertical marketing systems

answer

channels in which the whole channel focuses on the same target market at the end of the channel three types: corporate, administered, and contractual

question

corporate channel systems

answer

corporate ownership all along the channel -may develop my vertical integration-acquiring firms at different levels of channel activity -complete cooperation, controlled by one company ex. Florsheim shoes, sherwin williams

question

administered channel systems

answer

channel members informally agree to cooperate with each other -some to good cooperation -controlled by economic power and leadership ex. GE,miller beer, scotts miracle grow

question

contractual channel systems

answer

the channel members agree by contract to cooperate with each other -fairly good to good cooperation -controlled by contracts ex. Mcdonalds, holiday inn, ace hardware, supervalu, coca cola, chevrolet

question

ideal market exposure

answer

makes a product available widely enough to satisfy target customers needs but not exceed them

question

intensive distribution

answer

selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product -commonly needed for convenience products and business supplies used by all offices

question

selective distribution

answer

selling through only those intermediaries who will give the product special attention might be used to avoid selling to wholesalers or retailers that: 1)place orders that are too small to justify making calls 2) make too many returns or request too much service 3) have a poor credit rating 4) are not in a position to do a satisfactory job

question

exclusive distribution

answer

selling through only one intermediary in a particular geographic area

question

80/20 rule

answer

80% of a companys sales often come from only 20% of its customers until it becomes more selective in choosing customers

question

horizontal arrangements

answer

among competing retailers, wholesalers, or producers has been consistently ruled illegal by the US supreme court -a firm has to be able to legally justify any exclusive arrangements

question

multichannel distribution

answer

occurs when a producer uses several competing channels to reach the same target market-perhaps using intermediaries in addition to selling directly

question

reverse channels

answer

channels used to retrieve products that customers no longer want

question

basic approaches for entering international markets from least risky investment to most

answer

exporting-->liscensing-->managment contracting-->joint venture-->direct investment

question

exporting

answer

selling some of what the firm produces to foreign markets

question

management contracting

answer

means the seller provides only management and marketing skills-other own the production and distribution facilities

question

joint venture

answer

a domestic firm enters into a partnership with a foreign firm

question

direct investment

answer

a parent firm has a division (or owns a separate subsidiary firm) in a foreign market

question

logistics

answer

the transporting, storing, and handling of goods in ways that match the target customers needs with a firms marketing mix (physical distribution)

question

developed economies in the US and europe spend about _______% of GDP on logistics related costs while in the developing economies of latin america and africa costs are _____% or more

answer

9-15, 30

question

customer service level

answer

how rapidly and dependably a firm can deliver what they the customers want

question

physical distribution (PD) concept

answer

all transporting, storing, and product handling activites of a business and a whole channel system should be coordinated as one system that seeks to minimize the cost of distribution for a given customer service level -fast PD service can be critical for retailers that appeal to consumers who are eager to get a new product that is in hot demand

question

in selecting a PD system, the _____________________ involves evaluating each possible PD system and identifying all of the costs of each alternative

answer

total cost approach

question

Just in time (JIT) delivery system

answer

-reduces PD costs but no security blanket if a supplier is late -requires that a supplier have extremely high control in every PD activity

question

supply chain

answer

the complete set of firms and facilities and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers

question

electronic data interchange

answer

an approach that puts info in a standardized format easily shared between different computer systems

question

transporting costs as a % of selling price for different products

answer

Most to least expensive: sand and gravel-->coal-->cabbage-->iron ore-->pharmaceuticals

question

railroads

answer

carry more than any other mode in US transportation system -account for less than 10% of transport revenues -carry heavy and bulky goods: coal, steel and chemicals -not well suited for perishable items or those in urgent demand -medium cost, average delivery speed, extensive locations served, high ability to handle a variety of goods, medium dependability in meeting schedules

question

trucks

answer

-75% of US consumer products travel at least part of the way from producer to consumer by truck -high cost, fast delivery speed, very extensive # of locations served, high ablility to handle a variety of goods, high dependability in meeting schedules

question

water

answer

-the slowest shipping mode but it is usually the lowest cost way of shipping heavy freight -very low cost and delivery speed -limited # of locations served -very high ability to handle a variety of goods -very low frequency of scheduled shipments -medium dependability in meeting schedules

question

pipeline

answer

-used primarily to move oil and natural gas -low cost and slow delivery speed -very limited # of locations served and very limited ability to handle a variety of goods

question

air

answer

-most expensive transporting mode but the fastest -high value, low weight goods like high fashion clothing and parts of electronics industry are often shipped by air -extensive # of locations served -limited ability to handle a variety of goods -high frequency and dependability

question

private warehouses

answer

storing facilities owned or leased by companies for their own use -firms use private warehouses when a large volume of goods must be stored regularly -very high fixed investment -high control -low flexibility: fixed costs have already been committed

question

public warehouses

answer

independent storing facilities -a company might choose a public warehouse if it doesnt have a regular need for space -useful for manufacturers that must maintain stocks in many locations, including foreign countries -no fixed payment -low unit costs -low control -high flexibility: easy to end arangement

question

distribution center

answer

a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs

question

retailing

answer

covers all of the activities involved in the sale of products to final consumers -most retailers sell physical goods produced by someone else

question

in the US about _____ of new retailing ventures fail during the 1st year

answer

3/4ths

question

general stores

answer

which carries anything they could sell in reasonable volume -were the main retailers in the US about 150 yrs ago

question

Now most conventional retailers are __________________

answer

single line or limited line stores -stores that specialize in certain lines of related products rather than a wide assortment

question

specialty shop

answer

a type of conventional line store-usually small and has a distinct personality -expanded assortment and service ex. coach, gap, macys, kohls

question

department stores

answer

larger stores that are organized into many separate departments and offer many product lines -in the US the # of deparment stores, the avg sales per store, and their share of retail business has declined continuously since the 1970s

question

mass merchandising concept

answer

retailers should offer low prices to get faster turnover and greater sales volumes by appealing to larger markets

question

supermarkets

answer

large store specializing in groceries with self service and wide assortments -ex. safeway, IKEA, Costco, Home depot -to be called a supermarket a store must have annual sales of at least $2 million -net profits usually run 1% of sales or less

question

discount houses

answer

offer hard goods (cameras, TV, and appliances) at substantial price cuts to customers who would go to discounters low rent store, pay cash, and take care of any service or repair problems themselves

question

mass merchandisers

answer

large self service store with many departments that emphasize soft goods (housewares, clothing, and fabrics) and staples but still follow the discount house emphasis on lower margins to get faster turnover ex. Walmart and target

question

walmart handles ____% or more of the total national sales for whole categories of products

answer

30% -largest food retailer in the US

question

supercenters (hypermarkets)

answer

very large stores that try to carry not only food and drug items but all goods and services that the consumer purchases routinely -tries to meet all the customers routine needs at a low price -avg more than 150,000 sq ft and 50,000 items ex. meijer, fred meyer, super target, and walmart

question

warehouse club

answer

sams and costco

question

convenience (food) stores

answer

convenience oriented variation of conventional limited line food stores -they limit their stock to pickup or fill in items like bread, milk, beer, and eat on the go snacks ex. 7 eleven and stop n go

question

automatic vending

answer

selling and delivering products through vending machines -vending machine sales account for only about 1.5% of total US retail sales

question

it is estimated that more than ________% of all retail sales are in some way influened by the Internet

answer

45%

question

wheel of retailing theory

answer

new types of retailers enter the market as low status, low margin, low price operators, and then if successful evolve into more conventional retailers offering more services with higher operating costs and higher prices -then theyre threatened by new low status, low margin, low price retailers and the wheel turns again

question

many modern retailers are moving toward _________________ carrying any product lines they think they can sell profitably

answer

scrambled merchandising

question

large retail stores

answer

only about 11% of the retail stores but they account for almost 70% of all retail sales

question

corporate chain

answer

a firm that owns and manages more than one store-usually many -the main way for a retailer to achieve economies of scale

question

cooperative chain

answer

retailer-sponsored groups-formed by independent retailers that run their own buying organizations and conduct joint promotion efforts

question

voluntary chains

answer

wholesaler-sponsored groups that work with independent retailers

question

wholesaling

answer

concerned with the activities of those persons or establishments that sell to retailers and other merchants or to industrial, institutional, and commercial users, but that do not sell in large amounts to final consumers

question

wholesalers

answer

firms whose main function is providing wholesaling activities

question

manufacturers sales branches

answer

warehouses that producers set up at separate locations away from their factories -when manufacturers who just take over some wholesaling activities have sales branches they are considered wholesalers

question

merchant wholesalers

answer

own (take title to) the products they sell -they often specialize by certain types of products or customers

question

service wholesalers

answer

merchant wholesalers that provide ALL of the wholesaling functions three types: general merchandise, single line, and specialty

question

general merchandise wholesalers

answer

service wholesalers that carry a wide variety of nonperishable items such as hardware, electrical supplies, furniture, drugs, cosmetics, and automobile equipment

question

single line (or general line) wholesalers

answer

service wholesalers that carry a narrower line of merchandise then general merchandise wholesalers ex. may carry only food or apparel

question

specialty wholesalers

answer

service wholesalers that carry a very narrow range of products and offer more information and service than other service wholesalers

question

limited function wholesalers

answer

provide only some wholesaling functions

question

cash and carry wholesalers

answer

operate like service wholesalers except that the customer must pay cash

question

drop shippers

answer

own (take title to) the products they sell-but they do not actually handle, stock, or deliver them -mainly involved in selling- they get orders and then pass them on to producers -sell bulky products (like lumber) for which additional handling would be expensive and possibly damaging

question

truck wholesalers

answer

specialize in delivering products that they stock in their own trucks -their big advantage is that they promptly deliver perishable products that regular wholesalers prefer not to carry

question

rack jobbers

answer

specialize in hard to handle assortments of products that a retailer doesnt want to manage

question

catalog wholesalers

answer

sell out of catalogs that may be distributed widely to smaller industrial customers or retailers that might not be called on by other wholesalers -sell hardware, jewelry, sporting goods, and computers

question

agent wholesalers

answer

wholesalers who do not own the products they sell -their main purpose is to help in buying and selling

question

manufacturers agent

answer

sells similar products for several noncompeting producers for a commission on what is actually sold

question

export of import agents

answer

manufacturers agents who specialize in international trade-these agent wholesalers operate in every country and help international firms adjust to unfamiliar market conditions in foreign countries

question

brokers

answer

brings buyer and sellers together

question

export and import brokers

answer

operate like other brokers but they specialize in bringing together buyers and sellers from different countries

question

selling agents

answer

take over the whole marketing job of producers not just the selling function

question

combination export manager

answer

a blend of manufacturers agent and selling agent handling the entire export function for several producers of similar but non competing lines

question

auction companies

answer

provide a place where buyers and sellers can come together and bid to complete a transaction -usually for livestock, fur, tobacco, and used cars ex. Manheim for used cars

question

A "good" retail strategy planner knows that:

answer

the failure rate among beginning retailers is quite high.

question

When the manager of a Radio Shack electronics store decides to offer a store credit card (Radio Shack VISA), this is a decision about:

answer

price ***pg 335

question

retailer price decisions

answer

-credit cards -discount policies -frequency and level of sales prices -charge (or not) for delivery and other services

question

A typical problem for limited-line retailers is that:

answer

many of the items they carry are slow moving

question

Regarding supermarkets, which of the following is NOT true?

answer

After-tax profits are very good--averaging 10 to 15 percent of sales.

question

Most catalog retailers, like Macy's and L.L. Bean, now use a multichannel approach but when they mail catalogs to potential customers' homes, they are using ___________ retailing.

answer

direct mail

question

Regarding retail sales in the U.S., it is true that:

answer

-less than 8 percent of all retail sales are made by smaller stores--those with sales less than $1 million a year. -almost 70 percent of all retail sales are made by the largest stores--those with sales over $5 million a year. -corporate chains account for about 50 percent of retail sales.

question

retailer product decisions

answer

-product selection -after sale service -special services (special orders, entertainment, gift wrap)

question

Regarding wholesaling, what is true?

answer

Merchant wholesalers have higher sales than agent wholesalers, but their costs (as a percent of sales) are over three times as high.

question

the following DO NOT own (take title to) the products they sell:

answer

-Selling agents -Combination export managers -Brokers -Manufacturers' agents

question

Debbie Wood sells food products to grocery wholesalers and large supermarket chains in Tallahassee. She sells for several manufacturers with noncompeting lines of food products--earning a 5 percent sales commission. She neither handles nor owns the products she sells. Debbie is a:

answer

manufacturers' agent.

question

A producer is most likely to use a "selling agent" if:

answer

he lacks marketing know-how and working capital.

question

"Promotion" is MAINLY concerned with:

answer

telling the target market that the right Product is available in the right Place at the right Price.

question

To encourage potential buyers to purchase a ticket to its upcoming concert, a rock band posts a YouTube video of an earlier performance on the Web site of its next performance. This is an example of:

answer

publicity

question

Point-of-purchase materials, coupons, trade shows, calendars, merchandising aids, and sales training materials are all examples of:

answer

sales promotion

question

Southwest Airlines' "Ding" widget pops up on your computer desktop to let you know of lower fares to cities you want to visit. This is an example of a(n) _________ promotion objective.

answer

reminding

question

The AIDA model consists of four promotion jobs:

answer

getting Attention, holding Interest, arousing Desire, and obtaining Action

question

BMW places a TV ad for its new 7-series sedan in the highly-rated Academy Awards program. In the traditional communication model, BMW is the:

answer

source

question

Which of the following best illustrates communication "noise"?

answer

A motorist doesn't hear a radio ad because she is being stopped by a police officer for speeding.

question

Good marketing managers know that:

answer

different audiences may interpret a message differently.

question

What medium is appropriate for integrated direct-response promotion?

answer

telephone, interactive email, print and email

question

Gillette spent $100 million in its first year of advertising for a new type of razor and blades. All of its advertising was directed at final consumers in the hope that these consumers would go to retailers and ask for the product by name. This is an example of:

answer

pulling

question

retailer place decisions

answer

-physical stores and/or sales over the internet -number and location of stores -shopping atmosphere -store size -store hours

question

retailer promotion decisions

answer

-advertising -publicity -salespeople -helpful info

question

personal selling

answer

direct spoken communication between sellers and potnetial customers

question

mass selling

answer

communicating with large numbers of potential customers at the same time

question

advertising

answer

any PAID form of non-personal presentation of ideas, goods, and services by an identified sponsor

question

publicity

answer

any UNPAID form of nonpersonal presentation of ideas goods or services

question

sales promotions aimed at final consumers

answer

contests, coupons, samples

question

sales promotions aimed at wholesalers or retailers

answer

price deals, promotion allowances, sales contests, calendars, gifts, catalogs

question

sales promotions aimed at companys own sales force

answer

contests, bonuses, meetings, portfolios, displays, sales aids

question

sales managers are concerned with managing...

answer

personal selling

question

the informing promotional objective

answer

educating the customer

question

the persuading promotional objective

answer

the firm will try and develop a favorable set of attitudes to customers will buy and keep buying its product -shows how their brand is better than others

question

the reminding promotional objective

answer

-if target customers already have positive attitudes about a firms marketing mix

question

traditional communication process

answer

source-->encoding-->message channel-->decoding-->receiver-->feedback

question

source

answer

the sender of the message

question

receiver

answer

a potential customer

question

encoding

answer

is the source deciding what it wants to say and translating it into words or symbols that will have the same meaning to the receiver

question

noise

answer

any distraction that reduces the effectiveness of the communication process

question

pushing (a product through a channel)

answer

means using normal promotion effort-personal selling, advertising, and sales promotion to help sell the whole marketing mix to possible channel members

question

pulling ( a product through a channel)

answer

means getting customers to ask intermediaries for the product

question

innovators

answer

3-5% -first to adopt an idea -young and well educated -tend to rely on impersonal and scientific info sources rather than salespeople

question

early adopters

answer

10-15% -well respected by their peers and often are opinion leaders -tend to be younger, more mobile, and more creative than later developers -have fewer contacts than innovators outside their own social group -this group has the greatest contact with salespeople

question

primary demand

answer

demand for the general product idea and not just for the companys own brand -for if the product is a really new idea

question

selective demand

answer

demand for a company's own brand -during the market growth stage when more competitors enter the market

question

task method

answer

the most sensible approach to budgeting promotion expenditures -basing the budget on the job to be done -helps set priorities so that the money you spend produces specific results

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